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With Kerala in the grip of a severe drought, the government today said it will further restrict the use of groundwater by soft drink major Pepsico at Palakkad even as traders have planned to stop the sale of Pepsi and Coca Cola in the state.

"The government will take stern measures to restrict usage of groundwater due to prevailing drought and if possible stop Pepsico from drawing it at its plant at Puthussery in Palakkad by using the power vested in it under the State Disaster Management Act," Water Resources minister Mathew T Thomas told the Assembly today.

Under these special circumstances, the company has to reduce the use of water and the government would take all possible steps in this regard, Thomas said.

Meanwhile, Pepsico rejected allegation of "misuse" of ground water and said abstraction of water by the company has not affected borewell, open well and groundwater discharge structures in any village around the plant.

Kerala Vyapari Vyavasai Ekopana Samiti President T Nasaruddin said traders would boycott the sale of Coca Cola and Pepsi as a mark of protest against alleged exploitation of groundwater by the soft drinks majors.

"A final decision in this regard would be taken on March 14 after a meeting with the Chief Minister," Nasaruddin said adding "the decision was in tune with a similar resolve of traders in neighbouring Tamil Nadu".

In a related development, Chief Minister Pinarayi Vijayan welcomed the move of traders and said government would extend support to the initiative to check the threat to exploitation of water, pollution and lifestyle diseases.

In a facebook post, Vijayan said traders of Karnataka and Tamil Nadu had already decided to stop the sale of Pepsi and Coca Cola and "it is seen from media reports that traders in Kerala are also planning to take up this. It is expected that all traders will become part of this", Vijayan said.

Thomas was replying to a submission of CPI(M) veteran and Chairman of State Administrative Reforms Committee V S Achuthanandan, seeking steps to check the use of groundwater by the soft drink manufacturer.

Pepsico India said the company has been granted permission by the Kerala High Court to draw upto 6 lakh litres of water per day.

"We have been complying with the high court order, until the recent direction of Disaster Management Authority for reduction of water consumption up to 75 per cent," it said in a statement.

"It is unfortunate that this direction has not considered the high court's order and accordingly PepsiCo has been compelled to reduce its water consumption drastically to only 1.5 lakh litres per day," the company said.

"We have been abiding by the law of the land and hence it is disheartening to see the targeted misinformation campaign against us on the alleged misuse of water", Pepsico India Spokesperson Sandipan Ghatak said.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)